25 Red Flags for Junior Mining Management Teams explained by Matt Geiger, a portfolio manager at https://mjgcapital.com/. He publishes an investor letter almost every 6 months.

In this interview, we discussed the last investor letter where Matt explains that when investing in a junior mining company, the management team is a key factor to take a close look at.

Matt Geiger told me that a quality management team has the following characteristics:
1. Operating within its circle of competence
2. Focused obsessively on the task at hand,
3. Financial incentives aligned with shareholders,
4. Access to capital markets,
5. History of value creation in previous ventures, and
6. Demonstrated track record of operating ethically.

He believes that the easiest way to evaluate whether a management team is good is for investors to stick with teams that have treated them or someone close to them well in previous deals. However this situation is not always applicable, that’s why he made an evaluation technique to take a closer look at the management team.

More specifically, he explained to me 25 red flags to avoid when evaluating a junior mining management team. To make it easier he put them into 4 categories:

1. Personal Enrichment
2. Distracted/Loss of Faith
3. Warped Incentives
4. Lifestyle Company

Matt told me that identifying these red flags helps you decide whether to avoid investing or sell what you've already got. But remember, the avoidance of these red flags is far from a guarantee of success in an investment.

Timestamps:
00:00 recap
01:18 intro
02:37 red flag 1: royalties
07:16 red flag 2: discretionary bonuses
11:38 red flag 4: spin offs
14:00 red flag 3: personal loans
16:51 red flag 5: cheap financings
20:30 red flags 6 & 7: options
22:14 red flag 8: unrelated companies
29:03 red flag 9: independently wealthy
33:30 red flags 10, 11 & 12: personal inconveniences
38:48 red flag 13: bonus structure
41:16 red flag 14: change of control payments
42:06 red flag 15: property option deals/financings
46:16 red flag 16: external consultancy group
49:16 red flags 17 & 18: absurd expenses
51:02 red flags 19, 20 & 21: family business
56:52 red flag 22: ambulance chasing
01:00:24 red flags 23 & 24: old pals
01:02:20 red flags 25: what kind of ratio's does Matt use?
01:05:50 what is a quality management team?
01:12:37 contact details